Posted May 31st, 2012

What can Charities learn from Kickstarter?

Charities may not be allowed to fundraise on Kickstarter, but the popular crowdfunding website still has some important lessons to teach nonprofits about improving their fundraising.

Kickstarter is a website with a simple but powerful vision- to help individuals raise money for the creative projects they care about. And the wordprojectis important here, because you can’t use Kickstarter to raise money for just anything, it has to be for a project.

In Kickstarter-speak, a ‘project’ is a finite effort that produces a tangible result. Raising money to plant a new city garden or to create a new iPhone app, those are projects. They have a beginning, an ending, and they produce something. Projects. Raising money to start your new career or to help with your general finances, those are not projects. There’s no clear beginning or ending, and no tangible outcome. Not projects.

Because most charity fundraising is open ended in nature and the funds are put to various uses, it’s no wonder that Kickstarter prohibits charities from fundraising on its site. Despite this fact, nonprofits can still learn some valuable lessons from the project-based approach the platform has come to embody.

So What Makes Up a Kickstarter Project?

Before we get into why the Kickstarter approach is teed up for success, or how it can be applied to charity fundraising, we need to touch on its main elements in a little more detail. Here are some of the key characteristics of a Kickstarter project:

1. Time Bound– Kickstarter projects must be finite. In fact, there’s a maximum time limit of 60 days. The limit used to be 90 days, but a statistical analysis revealed that longer projects consistently failed at higher rates and the length was shortened.

2. Tangible Outcome– Every project on Kickstarter has to produce some sort of tangible result. Potential supporters are able to see upfront what the intended outcome is, and if they decide to give, they know exactly what their money will be used to achieve.

3. Defined Goal– Each project has a funding goal that is directly tied to the outcome the project is supposed to achieve. For example, if the project is to build a new park, then the fundraising goal will be determined by the estimated cost of building the park.

4. Video Appeal– Kickstarter projects all include a video appeal that the projects’ creators use to make the case for support. Videos range from the humorous, to the artistic, to the truly inspired, but all of the good ones somehow manage to be both engaging and persuasive.

5. Backer Incentives– Supporters of Kickstarter projects (called “backers”) are generally given something in return for their financial support. The rewards vary, but they tend to be keepsakes related to the underlying project somehow.

6. All or Nothing- In order for a project to receive the money it raises on Kickstarter, it has to reach the funding goal. That way, backers know that their money will only be transferred if enough other people contribute to make the project acheiveable.

And that’s it. Those are the basic elements of a Kickstarter project. Project creators share their projects online and people decide whether they want to contribute. It’s a relatively simple format, but it has yielded some incredible results. Of course much of this success is a function of the individual merit (and popularity) of each project, but there are aspects of the Kickstarter format itself that help facilitate this success. To understand why, let’s take a brief detour into some recent research on generosity.

Is Kickstarter Designed for Success?

Recent studies have confirmed that tangibility is positively correlated with generosity. In other words, when potential donors are given specific information abouthow donations will be used to make an impact, they are more likely to give and to give in greater amounts. [1]

In one such study, participants were given different information about Oxfam, an international nonprofit working to end poverty and injustice around the world. Some participants were given materials with detailed information about how donations would be used to provide clean water to villagers in West Africa. Others were given materials with more general information, indicating that donations would be used to meet a range of different needs across the globe. The results? Participants that received the more tangible information donated almost twice as much as those that received the general information. And the reason for the outcome? Participants provided with the more tangible information felt that their contributions were making a greater impact. [2]

The takeaway is that when supporters can connect their giving with specific positive outcomes they feel like they’ve made a real impact and they get more satisfaction out of the experience.

Keeping these findings in mind, it’s easy to see why Kickstarter’s project-based approach is set up for success. Kickstarter projects are inherently tangible. Each project is required to have a well-defined outcome. When people give to a project, they know exactly where their money is going and what it will be used to accomplish. Kickstarter combines this highly tangible approach with other best practices like time limits to create urgency (60 day limit), incentives for supporters (prizes given to backers), and engaging content (video appeals), to create an atmosphere primed for fundraising success.

Using the Project Approach for Charity Fundraising

Like Kickstarter projects, most fundraising campaigns are of limited duration, they have predefined fundraising goals, and they often use incentives to encourage supporter participation (all good things). One thing that many fundraising campaigns lack, however, is a tangible and clearly articulated outcome. As the research suggests, this is an area where charities would do well to learn from the Kickstarter approach. Providing information about how donations will be used to create specific positive outcomes will help increase giving levels and enhance donor satisfaction.

One recent campaign on StayClassy provides a nice example of how a clearly defined campaign outcome can help improve fundraising performance. The Society for the Prevention of Cruelty to Animals International operates a program that helps transport military pets back to the U.S. from the warzones in Iraq and Afghanistan. In April they launched a special campaign to raise enough money to bring over thirty animals back to the States. They needed to raise the money before June 1st when the airlines would shut down all animal travel because of the extreme heat of summer in the Middle East. Any animals left behind would be separated from their soldier companions and would almost surely die.

SPCAI succeeded in making the campaign highly tangible for its donors and fundraisers. Pictures and names of the actual animals in need of rescue were included on the campaign landing page. The messaging about how funds would be used was crystal clear. If you donated or raised money for the campaign, you knew that you would be helping these specific animals, saving them from an untimely death and keeping them united with the soldiers they’d befriended. The specific and tangible nature of the appeal helped SPCAI exceed its goal, with the group ultimately raising over $90,000 in just eight weeks!

Of course it’s not always possible to have such a laser-focused goal. The SPCAI campaign was highly specific because it was part of a special appeal meant to fulfill a clearly defined need. It’s still entirely possible, however, to make even your general fundraising appeals more tangible for supporters.

Consider the example of leading clean water nonprofit charity:water. Charity: water does an amazing job of tying supporter fundraising to tangible program outcomes. Fundraisers are told upfront that their money will help fund a water project to provide people in the developing world with clean water. Even better, fundraisers are assured that after they finish fundraising they will receive a packet showing exactly where the money they raised has gone. The digital report fundraisers receive is filled with specifics about the water project they helped fund. The report includes information about the community served, the type of technology used, the local partner that implemented the project, photos from the field, and the exact GPS coordinates of the project. It’s the ultimate proof of impact.

If you were a donor which would you prefer- giving to a charity that you knew in the abstract was doing good work, or seeing first hand how your gift helped improve the lives of people on the ground? It’s a no brainer. Intuition backs up what the research demonstrates. We feel better about our charitable giving when we can see how that giving has made a difference. So take a lesson from Kickstarter and start brainstorming how you can make your own fundraising a more tangible experience for donors and fundraisers. They’ll feel empowered and you’ll raise more money. It’s the ultimate win-win.